Smackey Dog Food Essay

From fresh foods, medicines, nuts and legumes, to soaps, clothes and other goods, the Kirkland Signature brands provide fine manufactured goods at a cost less than that of most leading brands. Aside from products for people, Kirkland Signature also takes pride in its line of products for pets. One of which is Kirkland Dog Food, a commodity for canine companions. This dog food line brings a variety of premium pet foods suitable for dogs of all breeds, sizes and ages.

* Not many boundaries, other than concern for brand identity, and not wearing the company resources too thin

In the year 2002, the US reached a land mark decision when the Sarbanes Oxley act was finally affected into law which principally changed the way auditing and financial reporting was being conducted. This act was prompted by high level frauds that public companies engaged in with regard to financial reporting and auditing practices. The act therefore recommended the setting up of a Public accounting Oversight board which was mainly to conduct regulatory and supervisory roles in auditing public audit firms and individual auditors. This was done through establishment of proper quality control measures on the work of auditors to minimize the audit risks that firms could face while conducting their work. The Ligand Pharmaceuticals case

SOX established the Public Company Accounting Oversight Board (PCAOB) to regulate the audit industry to oversee accounting professionals who provided independent audit reports for publicly traded companies (SEC). Key responsibilities include: registering public accounting firms and establishing audit, quality control, ethics, independence, and other standards relating to public company audits (SEC). Conducting inspections, investigations, and disciplinary proceedings of registered accounting firms, as well as enforcing compliance with Sarbanes-Oxley as a whole (SEC) also falls under PCAOB’s responsibility. SEC penalties have increased considerably in the recent years in addition to increased levels of enforcement activities.

SOX require public companies establish audit committees to conduct audit, and composed of only independent directors, and have one member with financial expertise. The audit committee is responsible for selecting the auditor. Furthermore, the Security Exchange Commission requires SOX to adopted rules of professional responsibility for attorneys representing public companies. The policies require attorneys to report evidence of a material violation of securities law or breach of fiduciary duty to the Chief Legal Officer, Chief Executive Officer, or the Board of Directors. Additionally, SOX requires businesses to “evaluation internal control process and adjust organizational policies to be aligned with SOX”, (Parles, O’Sullivan, & Shannon, 2007).

Audit committees incorporating SOX principles have spent a lot of time on SOX compliance issues, while sometimes neglecting strategy concerns. However, once past the learning curve, they started focusing more on increasing business value (p. 1). They are paying more attention to effective accounting principles and risk, since they have to help restore confidence in corporations (p. 1). They need to make sure financial projections are sound and accurate based on earnings and income estimates, before the information is released to the public. They should also assist management mitigate financial risks, as their responsibility is to understand and sign off on management’s approach (p. 2). Ever since SOX, restatements have increased (from 50 to 3000 from 2005 to 2007; increasing costs and driving declines in stock prices) and audit committees have needed independent auditors more often to be compliant (p. 3). These issues need to be resolved once and for all by focusing on the committee’s composition (a member of the board of directors of the issuer and independent should be privileged as per section 301 of SOX provisions). They should also include financial experts that will help decipher financial statements in which the audit committee will relay to the board, as well as assess competition’s performances (p. 3).

As noted, the SEC and the Justice Department have broad powers to investigate that far exceed those of the auditors, but SEC and Justice Department investigations, for even a limited reporting period, take years and the resulting prosecution even more years. A case in point is

To establish effective policies in order to enhance ethics in corporate America and prevent significant catastrophes such as the global economic meltdown of 2008 we need to propose new ethical policies and standards in our corporate system. Ethical issues must be on the strategic agenda! Integrity management should be a priority not only because it is legally required, but because it is the right thing to do. This memorandum will analyze the proposed ethical policies such as strengthening auditors’ independence and strengthening audit committee to make reforms in existing corporate sector.

To audit the International Bank of Africa information system we will go through five phases or steps.

The final step of the process is to report the findings to management and the board of directors through an ethics audit report. The report should outline all six steps discussed above and identify what the

Introduction. The authors study profiles of firms that included the accounting fraud. The main objective of the research is to improve the ethical conduct for accountants through the demonstration of the gap between constituted rules and its implementation in practice using the Enron and Arthur Anderson example. The accounting profession has to possess the truthfulness and completeness of financial statements. The investors make their decisions relying upon the auditor’s conclusion. Therefore, auditors are considered with the highest integrity and public trust. Unfortunately, the example of Enron and Arthur Anderson demonstrates the fundamental problem “material departure” in auditor’s professional performance. AICPA promotes integrity, competency, and objectivity that should be the part of professional thinking and actions. The researchers emphasizes goals of financial reporting (usefulness, certainty, and accuracy) that are followed by the AICPA Code of Conduct (p. 272).

• The parties who create these auditing standard rules, such as SEC, Auditing Standard Board. They should publish the Sarbanes-Oxley Act earlier. They should be considered the non-auditing services for auditing clients is a serious issue earlier.

Phase three focuses on gathering the evidence and results collected during the phase two audit process and documentation of results in a complete and non-bias manner. This non-bias approach is achieved by the cross evaluation and verification of the results garnered by two or more auditors that exist outside of the current auditing team. In this phase, the team must determine if sufficient sampling data was obtained in order to return a

Smackey Dog Foods has not been specifically stated as a private or public company. If it is public entity, it would be required to undertake annual audit by a firm that is independently registered as per the rules of SEC. However, Smackey Dog Food Company appears to be a company that is privately owned and thus SEC rules would require the company to comply with the US GAAP in accordance with the guidance from the American Institute of Certified Public Accountants. The above is required because the standards of independence, objectivity and integrity of SEC and AICPA correspond and thus giving the same effect on the operations of the company.

Corporations should set up an effective audit committee to oversight the company operation. If company lack of an effective governance mechanism will lead to manager’s corruption. There is a conflict interests and a lack of surveillance of management by the audit committee contributed to the Enron collapse in 2001(Li,2010,p37). ASX gives some recommendations about how to make up an effective audit committee. An effective audit committee should be constituted all of non-executive directors ,a majority of them are independent directors, and there are at least there members. These ways can effectively improve the quality of financial report, establish an honest atmosphere, and improve the confidence of public to financial report’s truth and objectivity. An effective audit committee also should have a formal charter to more competently perform the audit committee’s duties(ASX,2010,pp26-28). These recommendations make corporate governance under oversight to take a more ethical operation.